State farm “with teeth”: Heightened judicial review in the absence of executive oversight

New York University Law Review

Volumn 89, Issue 5, 2014, Pages 1589-1660

  Sharkey, Catherine M ^a  

^a NEW YORK UNIVERSITY SCHOOL OF LAW   (United States)

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EID: 84912068470     PISSN: 00287881     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (348)

1. I fully recognize that executive oversight and judicial review also serve quite different purposes. Executive oversight promotes coordination between different parts of the executive branch, see, e.g., Michael A. Livermore & Richard L. Revesz, Regulatory Review, Capture, and Agency Inaction, 101 Geo. L.J. 1337, 1367-69 (2013) (discussing OIRA's coordination function), whereas judicial review embodies a vision of separation of powers.
2. Sidney A. Shapiro & Richard E. Levy, Heightened Scrutiny of the Fourth Branch: Separation of Powers and the Requirement of Adequate Reasons for Agency Decisions, 1987 Duke L.J. 387, 440 ("Rationalist review acknowledges the unique constitutional position of agencies outside of the tripartite system of government envisioned by the Framers, and compensates through heightened scrutiny of agency decisions in the form of the requirement that agencies give adequate reasons.").
3. Here, it is worth clarifying the scope of my argument. I am not making a general argument across the board that judicial review of all agency actions, including, for example, statutory interpretation, should vary inversely with executive oversight. Instead, this Article provides a justification for more stringent hard-look judicial review absent executive oversight in specific contexts where agency decision-making is distinctly factbased, such as agency cost-benefit analyses and conflict preemption determinations. These fact-based inquiries present prime targets for the information-forcing role provided by executive oversight or judicial review.
4. Exec. Order No. 12,866, § 2(b), 3 C.F.R. 638, 640 (1993).
5. 5 U.S.C. § 706 (2012).
6. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983).
7. By "State Farm with teeth," I mean a more exacting standard than the ordinary, deferential one by which the agency is required only to provide reasonable assertions to support its action. Catherine M. Sharkey, Preemption As a Judicial End-Run Around the Administrative Process?, 122 Yale L.J. Online 1, 10 n.37 (2012).
8. Catherine M. Sharkey, What Riegel Portends for FDA Preemption of State Law Products Liability Claims, 103 Nw. U. L. Rev. 437, 449 n.60 (2009).
9. 647 F.3d 1144 (D.C. Cir. 2011).
10. The Business Roundtable decision is susceptible to multiple interpretations. A more narrow view would limit its applicability to regulations promulgated by the SEC, given the SEC's congressional mandate in the Securities Exchange Act to consider the economic implications of its rulemakings. An alternative political interpretation connects the outcome in Business Roundtable to an ideologically driven distaste for regulation. For further exploration of these alternatives.
11. Exec. Order No. 13,132, 3 C.F.R. 206 (2000).
12. Preemption: Memorandum for the Heads of Executive Departments and Agencies, 74 Fed. Reg. 24,693 (May 20, 2009).
13. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 315, 124 Stat. 1376, 1524 (2010).
14. While I certainly agree that there are additional dimensions to the preemption determination-such as federalism concerns-that are absent from cost-benefit analysis, I disagree that the two realms are wholly divorced. Cf., e.g., Thomas W. Merrill, Preemption and Institutional Choice, 102 Nw. U. L. Rev. 727, 779-80 (2008) (arguing that while agencies are better than courts when it comes to "pragmatic" variables such as cost-benefit analysis, courts are the "least worst" institution to decide preemption questions due to their expertise in preserving constitutional division of powers, preserving stability, and balancing state and federal authority).
15. E.g., Richard L. Revesz & Michael A. Livermore, Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health (2008).
16. Cass R. Sunstein, The Cost-Benefit State: The Future of Regulatory Protection (2002).
17. John D. Graham, Saving Lives Through Administrative Law and Economics, 157 U. Pa. L. Rev. 395 (2008).
18. Thomas O. McGarity, A Cost-Benefit State, 50 Admin. L. Rev. 7 (1998).
19. Compare Cass R. Sunstein, The Stunning Triumph of Cost-Benefit Analysis, Bloomberg View (Sept. 12, 2012, 6:30 PM), http://www.bloombergview.com/articles/ 2012-09-12/the-stunning-triumph-of-cost-benefit-analysis (describing cost-benefit analysis as part of the informal constitution of the U.S. regulatory state).
20. Thomas O. McGarity, Regulatory Analysis and Regulatory Reform, 65 Tex. L. Rev. 1243, 1331 (1987) ("The considerable limitations of cost-benefit analysis can be avoided by recognizing that cost-benefit analysis alone cannot dictate regulatory results in most regulatory contexts.").
21. Thomas O. McGarity, Regulatory Analysis and Regulatory Reform, 65 Tex. L. Rev. 1243, 1331 (1987) ("The considerable limitations of cost-benefit analysis can be avoided by recognizing that cost-benefit analysis alone cannot dictate regulatory results in most regulatory contexts.").
22. See, e.g., Viet D. Dinh, Reassessing the Law of Preemption, 88 Geo. L.J. 2085, 2092 (2000) ("[T]he task for the Court [for preemption analysis] is to discern what Congress has legislated and whether such legislation displaces concurrent state law-in short, the task of statutory construction.").
23. Daniel J. Meltzer, Preemption and Textualism, 112 Mich. L. Rev. 1, 7 (2013) ("[I]n an era in which textualist statutory interpretation has grown enormously in significance, a purposive approach to statutory interpretation remains powerful, even dominant, in preemption cases.").
24. See, e.g., Wyeth v. Levine, 555 U.S. 555, 588-89 (2009) (describing two kinds of implied conflict preemption: "where compliance with both federal and state regulations is a physical impossibility for one engaged in interstate commerce" and where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress").
25. To be sure, unlike the case of agency cost-benefit analysis, most of the examples here point to the dearth, rather than the collection, of such fact-based evidence. But that is at least in part because, in this realm of conflict preemption, such information has not (to date) been insisted upon by executive oversight, judicial review, or congressional mandate.
26. See Supplemental Applications Proposing Labeling Changes for Approved Drugs, Biologics, and Medical Devices, 73 Fed. Reg. 49,603, 49,605-06 (Aug. 22, 2008) ("This amendment is intended to clarify FDA's existing policies and is intended to ensure that scientifically valid and appropriately worded warnings will be provided in the approved labeling for medical products, and to prevent overwarning, which may deter appropriate use of medical products, or overshadow more important warnings.").
27. Letter from Henry A. Waxman, Chairman, House Comm. on Oversight & Gov't Reform, et al., to Andrew C. von Eschenbach, Comm'r, FDA 4 (Jan. 23, 2008), available at http://oversight-archive.waxman.house.gov/documents/20080123120931.pdf.
28. Letter from Stephen R. Mason, Acting Assistant Comm'r for Legislation, FDA to Hon. Edward M. Kennedy, Chairman, Comm. on Health, Educ., Labor, & Pensions, U.S. Senate 2-3 (Mar. 7, 2008), available at http://www.regulations.gov/#!documentDetail;D= FDA-2008-N-0032-0023 (view attachment titled "FDA Response [Office of Legislation] to The Honorable Edward M. Kennedy").
29. Catherine M. Sharkey, Federalism Accountability: "Agency-Forcing" Measures, 58 Duke L.J. 2125, 2188-89 (2009) [hereinafter Sharkey, Federalism Accountability].
30. See, e.g., News Release, Comptroller of the Currency Adm'r of Nat'l Banks, Comptroller Hawke Urges New Approach to Combating Predatory Lending (July 24, 2003), available at http://www.occ.gov/static/news-issuances/news-releases/2003/nr-occ- 2003-57.pdf.
31. Preemption Determination and Order, 68 Fed. Reg. 46,264, 46,269 (Aug. 5, 2003).
32. Indeed, the Dodd-Frank Act now instantiates such a requirement: The OCC must demonstrate with "substantial evidence" that state law "significantly interferes" with the national banking regime in order to promulgate a preemptive regulation. Dodd-Frank Act § 1044(a), 12 U.S.C. § 25b(b)(1)(B), (c) (2012).
33. Baher Azmy, Squaring the Predatory Lending Circle, 57 Fla. L. Rev. 295, 374-75 (2005) (describing the problems with the Georgia law, which ultimately resulted in the law's amendment). Moreover, the OCC should have to address contrary empirical evidence in the regulatory record. In the aforementioned footnote, the OCC acknowledged that various empirical studies had reached a contrary conclusion, but addressed only one, pointing to its inherent methodological limitations.
34. See, e.g., Lei Ding et al., Univ. of N.C. Ctr. for Cmty. Capital, The Impact of Federal Preemption of State Anti-Predatory Lending Laws on the Foreclosure Crisis 37-39 (2010), available at http://ccc.unc.edu/contentitems/theimpact- of-federal-preemption-of-state-anti-predatory-lending-laws-on-the-foreclosurecrisis/ (presenting findings that preemption led to higher risk of a default for mortgages originated by OCC lenders in states with strong anti-predatory lending laws).
35. 823 F. Supp. 2d 387 (S.D.W. Va. 2011).
36. Am. Bar Ass'n, Res. 117, § 3 (2010) (emphasis added).
37. Adoption of Recommendation 2010-1, Agency Procedures for Considering Preemption of State Law, 76 Fed. Reg. 81, 83 (Jan. 3, 2011) (emphasis added).
38. Dodd-Frank Act § 1044(a), 12 U.S.C. § 25b(c) (2012) (emphasis added).
39. Parks v. MBNA Am. Bank, N.A., 278 P.3d 1193 (Cal. 2012).
40. The Congressional Budget Office analyzed eighty-five Regulatory Impact Analyses (RIAs) and concluded that the average cost per RIA was $570,000, but ranged from $14,000 to $6 million. Cong. Budget Office, Regulatory Impact Analysis: Costs at Selected Agencies and Implications for the Legislative Process, at viii (1997). Hahn and Tetlock estimated that the cost of analyzing a major regulation is about $720,000, and that total regulatory impact analyses cost about $72 million annually. Robert W. Hahn & Paul C. Tetlock, Has Economic Analysis Improved Regulatory Decisions?, 22 J. Econ. Persp. 67, 80 (2008).
41. Eric A. Posner, Controlling Agencies with Cost-Benefit Analysis: A Positive Political Theory Perspective, 68 U. Chi. L. Rev. 1137, 1146 (2001) ("Cost-benefit analysis is expensive because surveys must be conducted and experts retained … .").
42. See, e.g., Robert W. Hahn et al., Assessing Regulatory Impact Analyses: The Failure of Agencies to Comply with Executive Order 12,866, 23 Harv. J.L. & Pub. Pol'y 859, 861-62 (2000) (proposing a number of recommendations to improve agency compliance with Executive Order 12,866).
43. Robert W. Hahn & Patrick M. Dudley, How Well Does the U.S. Government Do Benefit-Cost Analysis?, 1 Rev. Envtl. Econ. & Pol'y 192, 209 (2007)
44. Robert W. Hahn, The Economic Analysis of Regulation: A Response to the Critics, 71 U. Chi. L. Rev. 1021, 1024-31 (2004).
45. Robert W. Hahn & Patrick M. Dudley, How Well Does the U.S. Government Do Benefit-Cost Analysis?, 1 Rev. Envtl. Econ. & Pol'y 192, 209 (2007)
46. See, e.g., Robert W. Hahn et al., Assessing Regulatory Impact Analyses: The Failure of Agencies to Comply with Executive Order 12,866, 23 Harv. J.L. & Pub. Pol'y 859, 861-62 (2000) (proposing a number of recommendations to improve agency compliance with Executive Order 12,866).
47. Media Advisory, Comm. on Capital Mkts. Regulation, CCMR Warns That Inadequate Cost-Benefit Analysis Opens Dodd-Frank Rulemaking to Challenge and Delay 1 (Mar. 7, 2012), http://capmktsreg.org/pdfs/2012.03.07_CBA_letter.pdf.
48. Kirti Datla & Richard L. Revesz, Deconstructing Independent Agencies (and Executive Agencies), 98 Cornell L. Rev. 769, 840 & n.395 (2013).
49. U.S. Gov't Accountability Office, GAO-14-67, Dodd-Frank Regulations: Agencies Conducted Regulatory Analyses and Coordinated but Could Benefit from Additional Guidance on Major Rules 14-15, 77-84 (2013).
50. See Arthur Fraas & Randall Lutter, On the Economic Analysis of Regulations at Independent Regulatory Commissions: Would Greater Use of Economic Analysis Improve Regulatory Policy at Independent Regulatory Commissions? 2 (Resources for the Future Discussion Paper, RFF DP 11-16, 2011).
51. Sally Katzen, OIRA at Thirty: Reflections and Recommendations, 63 Admin. L. Rev. 103, 110 (2011) (pointing to independent agencies' tendency to conduct inferior cost-benefit analysis as a reason why these agencies' regulations should be subject to more demanding cost-benefit requirements and OIRA review).
52. Edward Sherwin, The Cost-Benefit Analysis of Financial Regulation: Lessons From the SEC's Stalled Mutual Fund Reform Effort, 12 Stan. J.L. Bus. & Fin. 1, 17 (2006) ("Though [the SEC] does conduct CBA on several levels, none of its practices demonstrate the analytical rigor contemplated by Executive Order 12,866 or the policy guidelines regarding its implementation.").
53. See U.S. Gov't Accountability Office, Highlights of GAO-13-101, A Report to Congressional Addressees (2012), available at http://www.gao.gov/assets/660/6509 48.pdf ("GAO's review of selected rules found that regulators did not consistently follow key elements of the OMB guidance in their regulatory analyses… . By not more closely following OMB's guidance, [many] financial regulators continue to miss an opportunity to improve their analyses.").
54. See Catherine M. Sharkey, Federalism in Action: FDA Regulatory Preemption in Pharmaceutical Cases in State Versus Federal Courts, 15 J.L. & Pol'y 1013, 1040-46 (2007).
55. Colacicco v. Apotex, Inc., 432 F. Supp. 2d 514, 525 (E.D. Pa. 2006)
56. Bextra & Celebrex Mktg. Sales Practices & Prods. Liab. Litig., No. M:05- 1699 CRB, 2006 WL 2374742, at *8 (N.D. Cal. Aug. 16, 2006).
57. See Arthur Fraas & Randall Lutter, On the Economic Analysis of Regulations at Independent Regulatory Commissions: Would Greater Use of Economic Analysis Improve Regulatory Policy at Independent Regulatory Commissions? 2 (Resources for the Future Discussion Paper, RFF DP 11-16, 2011).
58. See Robert W. Hahn & Cass R. Sunstein, A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis 37 (Univ. Chicago Law Sch. John M. Olin Law & Econ. Working Paper No. 150, 2002) ("[M]any … [independent] agencies do not routinely quantify the benefits and costs of their proposed regulations, in part because they are not required to do so.").
59. Benefit-Cost Analysis at Independent Regulatory Agencies, 78 Fed. Reg. 41,355 (July 10, 2013)
60. Cost-Justifying Regulations: Protecting Jobs and the Economy by Presidential and Judicial Review of Costs and Benefits: Hearing Before the Subcomm. on Courts, Commercial, & Admin. Law of the H. Comm. on the Judiciary, 112th Cong. 34 (2011) (statement of Harold Furchtgott-Roth, Former Comm'r, Fed. Commc'ns Comm'n).
61. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
62. It is worth emphasizing at this point that the overall social welfare goal of the "State Farm with teeth" standard posited by this Article is improvement in regulatory outcomes, not merely the production of more (or optimal) information, as discussed in Part V.A.1.
63. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
64. See, e.g., Matthew C. Stephenson, A Costly Signaling Theory of "Hard Look" Judicial Review, 58 Admin. L. Rev. 753, 755-56 (2006) (arguing that both the executive and judiciary overcome their informational disadvantage by forcing information out of the agencies in the form of detail, polish, and thoroughness of their explanations).
65. Emerson H. Tiller, Resource-Based Strategies in Law and Positive Political Theory: Cost-Benefit Analysis and the Like, 150 U. Pa. L. Rev. 1453, 1459 (2002) (arguing that the essence of hard-look review is to attack the reasoning processes of the regulator and force it to spend more of its resources on producing information).
66. An agency must demonstrate that it has "examine[d] the relevant data and articulate[d] a satisfactory explanation for its action, including a rational connection between the facts found and the choice made." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
67. Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962) (internal quotation marks omitted).
68. See, e.g., Matthew C. Stephenson, A Costly Signaling Theory of "Hard Look" Judicial Review, 58 Admin. L. Rev. 753, 755-56 (2006) (arguing that both the executive and judiciary overcome their informational disadvantage by forcing information out of the agencies in the form of detail, polish, and thoroughness of their explanations).
69. See, e.g., Cass R. Sunstein, From Technocrat to Democrat, 128 Harv. L. Rev. (forthcoming 2014) (manuscript at 8-9) ("[A] requirement of reason-giving can be seen as an effort to ensure that technical expertise is in fact being applied, and that agencies are not merely bowing to political winds.").
70. Thomas O. McGarity, Some Thoughts on "Deossifying" the Rulemaking Process, 41 Duke L.J. 1385, 1412 (1992). The point here is that even McGarity-a leading critic of heightened judicial review, on the ground that it is likely to stymie new rulemakings, experimentation, and revisitation of old rules-agrees that it is information forcing. McGarity's concerns regarding the ossification of the rulemaking process are addressed in Part V.A.5.
71. Several commentators, however, have expressed their opinion that Chevron deference may be more or less appropriate depending upon whether the agency at issue is an executive or independent agency. Randolph May has argued that courts reviewing independent agencies' statutory interpretations should accord them less Chevron deference than executive agencies. Randolph J. May, Defining Deference Down: Independent Agencies and Chevron Deference, 58 Admin. L. Rev. 429, 442 (2006).
72. John F. Duffy, Administrative Common Law in Judicial Review, 77 Tex. L. Rev. 113, 203 n.456 (1998) ("If the courts really followed the common law logic of Chevron, they should have balked at extending Chevron to [independent] agencies, which have less democratic accountability than agencies like the EPA, whose heads serve at the pleasure of the President.").
73. Barry Friedman, The Birth of an Academic Obsession: The History of the Countermajoritarian Difficulty, Part Five, 112 Yale L.J. 153, 164 n.31 (2002) ("Especially with regard to independent agencies, under control of officials appointed much like Supreme Court Justices, [deference under the Chevron principle based on accountability] is more than a little difficult to support … .").
74. David M. Gossett, Chevron, Take Two: Deference to Revised Agency Interpretations of Statutes, 64 U. Chi. L. Rev. 681, 689 n.40 (1997) (arguing that Chevron's political accountability rationale "would imply that independent agencies might not deserve Chevron deference"). In a similar vein, then-Professor Elena Kagan proposed that the degree of deference should vary depending on evidence concerning the extent of presidential involvement.
75. Elena Kagan, Presidential Administration, 114 Harv. L. Rev. 2245, 2380 (2001) (arguing for a "more refined version" of Chevron guided by whether "presidential involvement rises to a certain level of substantiality, as manifested by executive orders and directives, rulemaking records, and other objective indicia of decisionmaking processes").
76. In the 1970s, the overall trend was toward more activist substantive judicial review. See, e.g., Robert L. Rabin, Federal Regulation in Historical Perspective, 38 Stan. L. Rev. 1189, 1306 (1986) (summarizing cases that illustrate "the new mood of judicial activism that characterized the 1970s").
77. See, e.g., Michael Herz, The Rehnquist Court and Administrative Law, 99 Nw. U. L. Rev. 297, 312 (2004) (noting that the Supreme Court "has moved away from the 'hard look' exemplified by State Farm").
78. Adrian Vermeule, Our Schmittian Administrative Law, 122 Harv. L. Rev. 1095, 1119-21 (2009) (arguing that, in a series of counter-terrorism cases after 9/11, the D.C. Circuit Court of Appeals adopted a "soft look" judicial review standard for decisions of the Treasury Department's Office of Foreign Assets Control).
79. See, e.g., Stephen Breyer, Vermont Yankee and the Courts' Role in the Nuclear Energy Controversy, 91 Harv. L. Rev. 1833, 1845 (1978) (arguing that "courts … should play a limited role, affecting as little as possible the outcome" given that "[j]udges, after all, are neither elected representatives nor experts in energy technology").
80. Scott A. Keller, Depoliticizing Judicial Review of Agency Rulemaking, 84 Wash. L. Rev. 419, 425-27 (2009) (supporting a soft hard-look doctrine when agencies act in their area of technical expertise in order to avoid judicial policymaking).
81. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
82. 5 U.S.C. § 706 (2012).
83. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971).
84. Donald R. Arbuckle, The Role of Analysis on the 17 Most Political Acres on the Face of the Earth, 31 Risk Analysis 884, 888 (2011).
85. Robert V. Percival, Presidential Management of the Administrative State: The Not-So-Unitary Executive, 51 Duke L.J. 963, 994-95 (2001).
86. David Kessler, A Question of Intent: A Great American Battle with a Deadly Industry 68 (2001).
87. 5 U.S.C. § 553(c) (2012).
88. See Kevin M. Stack, Interpreting Regulations, 111 Mich. L. Rev. 355, 360 (2012) ("At the most basic level, to issue a regulation, administrative procedure and judicial doctrine require an agency to publish a detailed explanation of the grounds and purposes of the regulation … .").
89. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
90. See SEC v. Chenery Corp. (Chenery I), 318 U.S. 80, 94-95 (1943) ("We merely hold that an administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.").
91. State Farm, 463 U.S. at 46 ("The first and most obvious reason for finding the rescission arbitrary and capricious is that NHTSA apparently gave no consideration whatever to modify the standard to require that airbag technology be utilized.").
92. See Sidney A. Shapiro & Richard E. Levy, Judicial Incentives and Indeterminacy in Substantive Review of Administrative Decisions, 44 Duke L.J. 1051, 1066 (1995) (drawing attention to the "conflicting messages" sent by the State Farm Court).
93. 556 U.S. 502 (2009).
94. Donald R. Arbuckle, The Role of Analysis on the 17 Most Political Acres on the Face of the Earth, 31 Risk Analysis 884, 888 (2011).
95. See, e.g., Kennecott Copper Corp. v. EPA, 462 F.2d 846, 850 (D.C. Cir. 1972) ("There are contexts, however, contexts of fact, statutory framework and nature of action, in which the minimum requirements of the Administrative Procedure Act may not be sufficient.").
96. Gillian E. Metzger, Foreword: Embracing Administrative Common Law, 80 Geo. Wash. L. Rev. 1293, 1303 (2012). Metzger describes the trajectory as a "pattern of judicial common law development punctuated by periodic resistance."
97. Antonin Scalia, Back to Basics: Making Law Without Making Rules, Regulation, July/Aug. 1981, at 26.
98. Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 394 (1973)
99. United States v. Nova Scotia Food Prods. Corp., 568 F.2d 240 (1980) (laying out the basis for notice-and-comment requirements).
100. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 548 (2008) (Breyer, J., dissenting).
101. 435 U.S. 519 (1978).
102. Paul R. Verkuil, Judicial Review of Informal Rulemaking: Waiting for Vermont Yankee II, 55 Tul. L. Rev. 418, 419 (1981).
103. Jack M. Beermann & Gary Lawson, Reprocessing Vermont Yankee, 75 Geo. Wash. L. Rev. 856, 859 (2007).
104. Patrick M. Garry, Judicial Review and the "Hard Look" Doctrine, 7 Nev. L.J. 151, 154 n.20 (2007).
105. Merrick B. Garland, Deregulation and Judicial Review, 98 Harv. L. Rev. 505, 530 (1985).
106. Ronald M. Levin, Scope-of-Review Doctrine Restated: An Administrative Law Section Report, 38 Admin. L. Rev. 239 (1986) (interpreting Vermont Yankee to mean that "procedural questions ultimately call for the same type of analysis that substantive agency rulings do").
107. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
108. In fact, as Judge Carl McGowan of the D.C. Circuit suggested, the effect of Vermont Yankee's restriction on augmenting procedural requirements may have been to augment courts' scrutiny at the substantive review level. See Carl McGowan, Reflections on Rulemaking Review, 53 Tul. L. Rev. 681, 695 (1979).
109. Gillian E. Metzger, From the Files of the Supreme Court: The Hidden Story of Vermont Yankee, Admin. & Reg. L. News, Winter 2006, at 5, 5 (suggesting that the Vermont Yankee procedural limitations have simply forced judges either to "root[ ] their procedural demands (however implausibly) in the text of [APA] § 553" or to channel their scrutiny into substantive review).
110. 556 U.S. 502 (2009).
111. But see Neal Devins & David E. Lewis, Not-So Independent Agencies: Party Polarization and the Limits of Institutional Design, 88 B.U. L. Rev. 459, 460-62, 491-98 (2008) (presenting data demonstrating presidential political influence over independent agency officials).
112. Fox, 556 U.S. at 525 (citations omitted).
113. Randolph May likewise reads Fox for "what the opinions may portend concerning the question of a differential standard of review for executive branch and independent agencies." Randolph J. May, Defining Deference Down, Again: Independent Agencies, Chevron Deference, and Fox, 62 Admin. L. Rev. 433, 437 (2010).
114. It is worth noting that Justice Kennedy (who provided the fifth vote with his concurrence) signaled that his position hinged in large part on the fact that the FCC's policy change had more to do with its interpretation of law than its findings of facts. Fox, 556 U.S. at 538 (Kennedy, J., concurring in part and concurring in the judgment) ("The present case does not raise the concerns addressed in State Farm. Rather than base its prior policy on its knowledge of the broadcast industry and its audience, the FCC instead based its policy on what it considered to be our holding in FCC v. Pacific Foundation. The FCC did not base its prior policy on factual findings." (citations omitted)).
115. Justice Breyer's dissent implies that judicial scrutiny should vary inversely with political accountability. But if the problem is the insulation of independent agencies from ballot-box control, why give more power to an institution (courts) that is even more insulated from ballot-box control? I am grateful to Richard Revesz for prompting this question.
116. Gillian E. Metzger, From the Files of the Supreme Court: The Hidden Story of Vermont Yankee, Admin. & Reg. L. News, Winter 2006, at 5, 5 (suggesting that the Vermont Yankee procedural limitations have simply forced judges either to "root[ ] their procedural demands (however implausibly) in the text of [APA] § 553" or to channel their scrutiny into substantive review).
117. Additional arguments may support more stringent judicial review, even of executive branch agencies subject to meaningful executive oversight. For example, judicial review could serve as a corrective to overtly politicized agency determinations. See, e.g., Jody Freeman & Adrian Vermeule, Massachusetts v. EPA: From Politics to Expertise, 2007 Sup. Ct. Rev. 51, 54.
118. Massachusetts v. EPA, 549 U.S. at 533-35.
119. Moreover, there might be extensions to pursue in different realms. Consider, for example, judicial review of environmental impact statements required under the National Environmental Policy Act. If the EPA decides that an action is environmentally unsatisfactory, it refers the matter to the Council on Environmental Quality, a central agency that is part of the Executive Office of the President, which can weigh in on the matter with published findings. As an empirical matter, one might ask, do courts apply a more stringent standard of judicial review to an agency's environmental impact statement when the CEQ has published negative findings? See, e.g., Sierra Club v. U.S. Army Corps of Eng'rs, 701 F.2d 1011, 1030 (1983) ("[T]he court may properly be skeptical as to whether an EIS's conclusions have a substantial basis in fact if the responsible agency has apparently ignored the conflicting views of other agencies having pertinent expertise."). I am grateful to Karen Bradshaw Schulz for suggesting this example to me.
120. Exec. Order No. 12,291, § 9, 46 Fed. Reg. 13,193 (Feb. 17, 1981).
121. See 5 U.S.C. § 706 (2012) (no mention of cost-benefit analysis).
122. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
123. See, e.g., Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993) (establishing cost-benefit analysis requirements for some agency decision-making).
124. Exec. Order No. 13,563, 76 Fed. Reg. 3281 (Jan. 18, 2011) (same).
125. Exec. Order No. 13,132, 64 Fed. Reg. 43,255 (Aug. 4, 1999) (establishing guiding policies on federalism).
126. Michael A. Livermore & Richard L. Revesz, Rethinking Health-Based Environmental Standards, 89 N.Y.U. L. Rev. 1184, 1263 (2014).
127. The Livermore and Revesz view draws support from Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 226 (2009)
128. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1610 (2014).
129. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 51-57 (1983) (reviewing the NHTSA's cost-benefit analysis in connection with its decision to revoke a previous passive-restraint requirement).
130. James D. Cox & Benjamin J.C. Baucom, The Emperor Has No Clothes: Confronting the D.C. Circuit's Usurpation of SEC Rulemaking Authority, 90 Tex. L. Rev. 1811, 1831 (2012) ("In State Farm, the agency was under no express statutory obligation to weigh the rule's potential costs and benefits. Yet the agency did so anyway. The Supreme Court proceeded to assess the agency's actions on the agency's own terms.").
131. It is intriguing to observe that the period of more general deferential State Farm review evolved contemporaneously with the dawn of OIRA regulatory review.
132. I count as "soft evidence" cases in which judges mention, in a context that suggests significance, the fact that the regulation at issue has garnered OIRA's imprimatur. See, e.g., National Mining Ass'n v. MSHA, 599 F.3d 662, 667 (D.C. Cir. 2010) (rejecting a challenge to a regulation, noting that, under Executive Order 12,866, it was subject to review for compliance with "efficiency requirements").
133. Public Citizen, Inc. v. NHTSA, 374 F.3d 1251, 1256 (D.C. Cir. 2004) (rejecting a challenge to NHTSA's proposed unbelted rigid barrier crash test for passenger cars, noting that NHTSA had submitted a draft final regulation to OIRA for review).
134. Cactus Corner, LLC v. U.S. Dep't of Agric., 346 F. Supp. 2d 1075, 1087 (E.D. Cal. 2004) (rejecting a challenge to a USDA/APHIS rule allowing and setting conditions for importation of Spanish clementines, noting that under Executive Order 12,866, APHIS prepared a Regulatory Impact Analysis to assess costs and benefits).
135. See, e.g., Public Citizen, Inc. v. Mineta, 340 F.3d 39, 49-52 (2d Cir. 2003) (invalidating a NHTSA regulation subject to OIRA review as arbitrary and capricious, where NHTSA had rejected OIRA's suggestions in its return letter to the agency).
136. Defenders of Wildlife v. Salazar, 842 F. Supp. 2d 181, 188 n.4 (D.D.C. 2012) (invalidating regulations as arbitrary and capricious under State Farm, noting that "the Office of Management and Budget … complained about the failure to adequately define key terms").
137. Brief for Petitioners at 13.
138. Mineta, 340 F.3d 39 (No. 02- 4237), 2002 WL 32392046, at *13 (discussing OIRA review process and noting that OIRA directed NHTSA to "reconsider its determination").
139. Plaintiffs' Motion for Summary Judgment at 29.
140. Thomas J. Miles & Cass R. Sunstein, The Real World of Arbitrariness Review, 75 U. Chi. L. Rev. 761, 765-66 (2008) (noting the lack of literature on courts' rate of invalidation of agency regulations under State Farm).
141. Cf. Stephen Breyer, Breaking the Vicious Circle 80 (1993) ("[T]he judicial tendency to review less closely than in the past agency policy determinations for reasonableness argues for some such centralized reviewing capacity, perhaps within the Executive Branch itself.").
142. Cf. Stephen Breyer, Breaking the Vicious Circle 80 (1993) ("[T]he judicial tendency to review less closely than in the past agency policy determinations for reasonableness argues for some such centralized reviewing capacity, perhaps within the Executive Branch itself.").
143. 647 F.3d 1144 (D.C. Cir. 2011).
144. All agencies listed as "independent regulatory agenc[ies]" in the Paperwork Reduction Act are exempt from this requirement. See 44 U.S.C. § 3502(5) (2012) (defining independent agencies).
145. Curtis W. Copeland, Economic Analysis and Independent Regulatory Agencies, Admin. Conf. U.S. (Apr. 30, 2013), http://www.acus .gov/sites/default/files/documents/Copeland%20Final%20BCA%20Report%204-30-13.pdf (recommending strategies for independent regulatory agencies to improve their economic analyses).
146. Executive Order 12,291, signed by President Reagan in 1981, established executive oversight of agency rulemakings based on cost-benefit analysis. This basic framework has persisted for the past three decades, during four subsequent presidential administrations from both political parties. Exec. Order No. 12,291, 46 Fed. Reg. 13,193 (Feb. 17, 1981).
147. Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993).
148. Exec. Order 13,563, 76 Fed. Reg. 3,821 (Jan. 18, 2011).
149. Under President Reagan, Executive Order 12,291 required agencies to prepare extensive RIAs for all major rules. President Clinton largely carried forward the same framework in E.O. 12,866. E.O. 12,866 requires an "assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation." Exec. Order No. 12,866.
150. Office of Mgmt. & Budget, Circular A-4: Regulatory Impact Analysis (2003), available at http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/ a004/a-4.pdf.
151. Exec. Order No. 12,866, § 1 ("The Office of Management and Budget (OMB) shall carry out that review function. Within OMB, the Office of Information and Regulatory Affairs (OIRA) is the repository of expertise concerning regulatory issues, including methodologies and procedures that affect more than one agency, this Executive order, and the President's regulatory policies.").
152. See, e.g., Sidney A. Shapiro, Why Administrative Law Misunderstands How Government Works: The Missing Institutional Analysis, 53 Washburn L.J. 1, 20-21 (2013) (discussing how "OIRA quickly approved publication of the [Department of Agriculture's proposed rule to speed up the processing of chickens] even though the agency had not yet completed the cost-benefit analysis that was required because it was an economicallysignificant rule").
153. Lisa Heinzerling, Inside EPA: A Former Insider's Reflections on the Relationship Between the Obama EPA and the Obama White House, 31 Pace Envtl. L. Rev. (forthcoming 2014).
154. See Cass R. Sunstein, Financial Regulation and Cost-Benefit Analysis, Yale L.J.F. (forthcoming 2014) (manuscript at 11) (arguing that cost-benefit analysis "creates the right incentive to acquire additional information"). Indeed, as Sunstein eloquently put it, a virtue of "the aspiration to full analysis of costs and benefits is that the aspiration can itself be information-forcing."
155. See Michael A. Livermore, Cost-Benefit Analysis and Agency Independence, 81 U. Chi. L. Rev. 609, 626 (2014) ("In part as a response to the cost-benefit analysis requirement and OIRA review, EPA has made substantial investments in building its environmental economics capacity.").
156. Elizabeth Magill & Adrian Vermeule, Allocating Power Within Agencies, 120 Yale L.J. 1032, 1051 (2011) (highlighting the fact that necessitating cost-benefit analysis by courts and OIRA will "expand[ ] the range within which economists, scientists, and other nonlegal professionals effectively choose agency policy").
157. I fully recognize that executive oversight and judicial review also serve quite different purposes. Executive oversight promotes coordination between different parts of the executive branch, see, e.g., Michael A. Livermore & Richard L. Revesz, Regulatory Review, Capture, and Agency Inaction, 101 Geo. L.J. 1337, 1367-69 (2013) (discussing OIRA's coordination function), whereas judicial review embodies a vision of separation of powers.
158. Bus. Roundtable v. SEC, 647 F.3d 1144 (D.C. Cir. 2011). The proposed rule would have required public companies to include, in their own proxy materials, the names of certain shareholder-nominated candidates for election to the board of directors.
159. See Dodd-Frank Act Rulemaking Areas, CFTC, http://www.cftc.gov/LawRegulation/ DoddFrankAct/Rulemakings/index.htm (last visited June 7, 2014) ("As a result of the Dodd-Frank Wall Street Reform Act … [t]he CFTC has identified 38 areas where rules will be necessary.").
160. Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, SEC, https://www.sec.gov/spotlight/dodd-frank.shtml (last visited June 7, 2014) ("[The Dodd-Frank Act] contains more than 90 provisions that require SEC rulemaking, and dozens of other provisions that give the SEC discretionary rulemaking authority.").
161. Cf. Yoon-Ho Alex Lee, An Options Approach to Agency Rulemaking, 65 Admin. L. Rev. 881, 881 (2013) (describing Business Roundtable as having been "thought to have significantly raised the bar for rulemaking by independent agencies").
162. The Senators explained that their "request arises from our concern that regulatory agencies are conducting rulemakings to implement Dodd-Frank without adequately considering the costs and benefits of their rules and the effects those rules could have on the economy." Letter from Sen. Richard C. Shelby et al., Senate Comm. on Banking, Hous. & Urban Affairs, to Elizabeth A. Coleman, Inspector Gen., Fed. Reserve Bd., et al. (May 4, 2011) (on file with the New York University Law Review).
163. Litigants have relied upon Business Roundtable to urge courts to adopt exacting standards of judicial review. See, e.g., Brief in Support of Plaintiffs' Motion for Preliminary Injunctive Relief at 18.
164. Kobach v. U.S. Election Assistance Comm'n, No. 13-4095-EFMDJW (D. Kan. Oct. 23, 2013) (citing Business Roundtable as support for the argument that internally inconsistent agency decisions are arbitrary).
165. Reply Memorandum of Law in Further Support of Defendant Gary A. Prince's Motion for Partial Summary Judgment at 8 n.2, SEC v. Brown, No. 1:09-CV-01423(GK) (D.D.C. Mar. 23, 2012).
166. SEC v. Brown, No. 1:09-CV-01423(GK) (D.D.C. Mar. 23, 2012)
167. Raymond E. Areshenko, Business Roundtable v. Securities and Exchange Commission: The SEC's First Big Shot at Proxy Access in the Shadow of Dodd-Frank, 32 J. Nat'l Ass'n Admin. L. Jud. 719, 756-57 (2012) (praising the D.C. Circuit in Business Roundtable for having essentially forced the SEC to develop effective rules to govern the corporate sphere).
168. See Steven Sloan, Cost-Benefit Analysis Puts the Brakes on Dodd-Frank, Bloomberg (May 7, 2012, 11:18 AM), http://www.bloomberg.com/news/2012-05-07/costbenefit- analysis-puts-the-brakes-on-dodd-frank.html (discussing litigation and letters to regulators from industry groups).
169. Following the financial crisis and the passage of the Dodd-Frank Act, the CFTC began considering regulations that would enhance its oversight of registered investment companies, which many believed to have been exploiting regulatory exemptions in their derivative trading practices. See Inv. Co. Inst. v. CFTC, 720 F.3d 370, 374 (D.C. Cir. 2013) (summarizing the relevant rulemaking process).
170. "Violation of the Commodity Exchange Act and Administrative Procedure Act- Insufficient Evaluation of Costs and Benefits." Complaint at 39.
171. Inv. Co. Inst. v. CFTC, 891 F. Supp. 2d 162 (D.D.C. 2012) (No. 1:12-cv-00612), 2012 WL 1292673.
172. See Am. Equity Inv. Life Ins. Co. v. SEC, 613 F.3d 166, 177-179 (D.C. Cir. 2010) (vacating equity-indexed annuities rule on arbitrary and capricious grounds).
173. Chamber of Commerce v. SEC, 412 F.3d 133, 136 (D.C. Cir. 2005) (vacating mutual fund rule because of failure to consider costs and alternatives).
174. See Bus. Roundtable v. SEC, 647 F.3d 1144, 1148-49 (D.C. Cir. 2011) (critiquing the SEC's analysis).
175. See, e.g., Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, 77 Fed. Reg. 32,184, 32,198 (May 31, 2012) (order on rehearing and clarification) (rejecting plaintiffs' reliance on Business Roundtable to challenge a FERC order on the ground that "Business Roundtable dealt with a failure by the SEC to comply with specific provisions of the Exchange Act and the Investment Company Act of 1940 that require it to assess the economic impacts of a new rule").
176. 15 U.S.C. § 77b(b) (2012). Section 23(a)(2) of the Exchange Act requires that the Commission "consider … the impact … on competition" and prohibits the adoption of any rule that "would impose a burden on competition not necessary or appropriate in furtherance of the purposes of [the Exchange Act]."
177. Securities Exchange Act of 1934 § 23(a)(2), 15 U.S.C. § 78w(a)(2) (2012). The same standard is found in all four relevant securities acts.
178. See, e.g., Robert B. Ahdieh, Reanalyzing Cost-Benefit Analysis: Toward a Framework of Function(s) and Form(s), 88 N.Y.U. L. Rev. 1983, 1993 (2013) (arguing that the provision does not describe a straightforward cost-benefit analysis, but rather "is best understood as an unusual means for Congress to force SEC consideration of substantive factors not prioritized by its organic statutes, nor capable of ready incorporation into those statutes").
179. Jill E. Fisch, The Long Road Back: Business Roundtable and the Future of SEC Rulemaking, 36 Seattle U. L. Rev. 695, 714 (2013) ("[T]he language … merely directs the SEC to consider specific factors.
180. Congress did not tell the SEC how to balance these factors against each other, specify a dominant factor, or mandate a net positive outcome."). But see Rachel A. Benedict, Note, Judicial Review of SEC Rules: Managing the Costs of Cost-Benefit Analysis, 97 Minn. L. Rev. 278, 282 (2012) (noting that the SEC's congressional directive has been construed as a mandate to conduct economic analysis).
181. The SEC's Aversion to Cost-Benefit Analysis: Hearing Before the Subcomm. on TARP, Financial Services and Bailouts of Public and Private Programs of the H. Comm. on Oversight and Gov't Reform, 112th Cong. 10-11 (2012) [hereinafter SEC Hearing] (prepared statement of Mary Schapiro, Former Chairman, SEC) ("No statute expressly requires the Commission to conduct a formal cost-benefit analysis as part of its rulemaking activities, but-since at least the early 1980s-the Commission has considered potential costs and benefits in its rulemaking as a matter of good regulatory practice.").
182. Am. Petroleum Inst. v. EPA, 684 F.3d 1342, 1345 (D.C. Cir. 2012).
183. Under Whitman v. American Trucking Ass'ns, 531 U.S. 457, 471 (2001), the EPA is prohibited from conducting a cost-benefit analysis when setting NAAQS.
184. American Petroleum, 684 F.3d at 1351. Judge Ginsburg, moreover, took the opportunity to reiterate his critique of the SEC in Business Roundtable, which had not only ignored several studies submitted by commentators, but also failed as a more general matter to justify its decisions in light of the body of evidence that weighed against the agency's chosen path.
185. See, e.g., Cellco P'ship v. FCC, 700 F.3d 534, 551 (D.C. Cir. 2012) (considering a challenge to an FCC data-roaming rule).
186. Business Roundtable. In Ass'n of Private Sector Colleges & Universities v. Duncan, 681 F.3d 427, 447 (D.C. Cir. 2012)
187. Business Roundtable, 647 F.3d 1144, 1148 (D.C. Cir. 2011).
188. The D.C. Circuit's analysis of the CFTC's rule on commodity pool operators in Investment Co. Institute v. CFTC, 720 F.3d 370, 377-78 (D.C. Cir. 2013)
189. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
190. Moreover, commentators have argued that the court chided the SEC for failing to assess costs that largely presuppose a breach of fiduciary obligations. See, e.g., Anthony W. Mongone, Business Roundtable: A New Level of Judicial Scrutiny and Its Implications in a Post-Dodd-Frank World, 2012 Colum. Bus. L. Rev. 746, 765-66 (2012) (assessing the court's critique of the SEC's analysis of costs).
191. Michael E. Murphy, The SEC and the District of Columbia Circuit: The Emergency of a Distinct Standard of Judicial Review, 7 Va. L. & Bus. Rev. 125, 159 (2012) (same).
192. See 412 F.3d 133, 143-44 (D.C. Cir. 2005).
193. American Equity Investment Life Insurance Co. v. SEC, 613 F.3d 166 (D.C. Cir. 2010)
194. See Am. Equity, 613 F.3d at 178
195. The SEC rejected an empirical study done by Fidelity Investments that purported to demonstrate that an independent chairman did not have an effect upon fund performance. There is no evidence in the record that the SEC considered the costs of the requirement of seventy-five percent independent directors. Instead, the SEC argued that because boards typically have the authority under state law to hire staff to help board members, the condition would not create any new staffing costs. In a footnote, the SEC noted that even if the independent chairman condition resulted in increased staffing costs, there was "no reliable basis" upon which to estimate those costs. Investment Company Governance, 69 Fed. Reg. 46,378, 46,387 n.81 (Aug. 2, 2004).
196. Chamber of Commerce, 412 F.3d at 143. The court recognized that the SEC may only be able to determine "the range within which a fund's cost of compliance will fall, depending upon how it responds to the condition," but agreed with the Chamber that "it does not excuse the Commission from its statutory obligation to determine as best it can the economic implications of the rule it has proposed."
197. James D. Cox & Benjamin J.C. Baucom, The Emperor Has No Clothes: Confronting the D.C. Circuit's Usurpation of SEC Rulemaking Authority, 90 Tex. L. Rev. 1811, 1831 (2012) ("In State Farm, the agency was under no express statutory obligation to weigh the rule's potential costs and benefits. Yet the agency did so anyway. The Supreme Court proceeded to assess the agency's actions on the agency's own terms.").
198. Bus. Roundtable v. SEC, 647 F.3d 1144, 1151 (D.C. Cir. 2011).
199. Chamber of Commerce, 412 F.3d at 143.
200. James D. Cox & Benjamin J.C. Baucom, The Emperor Has No Clothes: Confronting the D.C. Circuit's Usurpation of SEC Rulemaking Authority, 90 Tex. L. Rev. 1811, 1831 (2012) ("In State Farm, the agency was under no express statutory obligation to weigh the rule's potential costs and benefits. Yet the agency did so anyway. The Supreme Court proceeded to assess the agency's actions on the agency's own terms.").
201. See, e.g., Ass'n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 448 (D.C. Cir. 2012) (holding that the Department of Education's compensation regulation was arbitrary and capricious unless the Department provided "some better explanation" for its choice to eliminate a "safe harbor" provision within the regulation, which was based on anecdotal examples of situations in which the provision had been abused).
202. Berge v. United States, 879 F. Supp. 2d 98, 134-35 (D.D.C. 2012) (rejecting Department of Defense action as arbitrary and capricious based in part on the court's conclusion that the medical literature and technology assessments relied on by the Department did not support the Department's conclusions).
203. See Cellco P'ship v. FCC, 700 F.3d 534, 550-51 (D.C. Cir. 2012).
204. Am. Petroleum Inst. v. EPA, 684 F.3d 1342, 1351 (D.C. Cir. 2012)
205. Nat'l Ass'n of Mfrs. v. SEC, 748 F.3d 359, 368 (D.C. Cir. 2014)
206. Commodity Pool Operators and Commodity Trading Advisors: Compliance Obligations, 77 Fed. Reg. 11,252, 11,275-83 (Feb. 24, 2012).
207. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
208. Cf. Matthew C. Stephenson, Bureaucratic Decision Costs and Endogenous Agency Expertise, 23 J.L. Econ. & Org. 469, 472 (2007) (discussing how constraining agency discretion may force the agency to develop its expertise).
209. See Michael A. Livermore, Cost-Benefit Analysis and Agency Independence, 81 U. Chi. L. Rev. 609, 626 (2014) ("In part as a response to the cost-benefit analysis requirement and OIRA review, EPA has made substantial investments in building its environmental economics capacity.").
210. Memorandum from U.S. Sec. & Exch. Comm'n, Div. of Risk, Strategy & Fin. Innovation & Office of Gen. Counsel, to the Staff of the Rulewriting Divs. & Offices, Current Guidance on Economic Analysis in SEC Rulemakings (Mar. 16, 2012), available at http://www.sec.gov/divisions/riskfin/rsfi_guidance_econ_analy_secrulemaking.pdf.
211. Elisse Walter, Using Economic Analysis in SEC Rulemaking, Harvard L. Sch. F. on Corp. Governance & Fin. Reg. (June 29, 2012, 11:13 AM), https://blogs.law.harvard.edu/corpgov/2012/06/29/usingeconomic- analysis-in-sec-rulemaking/ (discussing the Commission's heightened focus on economics and cost-benefit analysis).
212. See Craig M. Lewis, Chief Economist & Dir. of Div. of Risk, Strategy & Fin. Innovation, U.S. Sec. & Exch. Comm'n, Speech at SIFMA Compliance & Legal Society Luncheon: The Expanded Role of Economists in SEC Rulemaking (Oct. 16, 2012), available at https://www.sec.gov/News/Speech/Detail/Speech/1365171491420#.U4goGq1dX W4 (discussing developments at the RSFI pursuant to the SEC guidance policy changes).
213. Andrew Ackerman, Wanted: SEC Chief Economist, Wall St. J. (Jan. 7, 2014, 12:19 PM), http://blogs.wsj.com/ moneybeat/2014/01/07/wanted-sec-chief-economist/ (noting that the Financial Industry Regulatory Authority and the Municipal Securities Rulemaking Board have followed the Commission's lead in strengthening the role of economic impact analysis within the rulemaking process).
214. The SEC's Aversion to Cost-Benefit Analysis: Hearing Before the Subcomm. on TARP, Financial Services and Bailouts of Public and Private Programs of the H. Comm. on Oversight and Gov't Reform, 112th Cong. 10-11 (2012) [hereinafter SEC Hearing] (prepared statement of Mary Schapiro, Former Chairman, SEC) ("No statute expressly requires the Commission to conduct a formal cost-benefit analysis as part of its rulemaking activities, but-since at least the early 1980s-the Commission has considered potential costs and benefits in its rulemaking as a matter of good regulatory practice.").
215. While beyond the scope of this Article, each of these developments could have significant implications with respect to both institutional design and output of the agency.
216. Memorandum of Understanding Between the Office of Info. & Regulatory Affairs and the U.S. Commodity Futures Trading Comm'n (Mar. 9, 2012), available at http://www .whitehouse.gov/sites/default/files/omb/inforeg/regpol/oira_cftc_mou_2012.pdf. The MOU includes the following caveat: "The sharing of draft and final CFTC documents and other information with OIRA staff pursuant to this technical assistance shall not constitute submission of such materials to OIRA for review."
217. I fully recognize that executive oversight and judicial review also serve quite different purposes. Executive oversight promotes coordination between different parts of the executive branch, see, e.g., Michael A. Livermore & Richard L. Revesz, Regulatory Review, Capture, and Agency Inaction, 101 Geo. L.J. 1337, 1367-69 (2013) (discussing OIRA's coordination function), whereas judicial review embodies a vision of separation of powers.
218. See Catherine M. Sharkey, Agency Coordination in Consumer Protection, 2013 U. Chi. Legal F. 329, 329 (addressing the need for horizontal coordination across federal agencies).
219. Jamelle C. Sharpe, Judging Congressional Oversight, 65 Admin. L. Rev. 183, 212 (2013) ("This language [in E.O. 13,579], though seemingly innocuous, is more assertive than that typically used by Presidents when addressing independent agencies.").
220. Cass R. Sunstein, The Real World of Cost-Benefit Analysis: Thirty-Six Questions (and Almost as Many Answers), 114 Colum. L. Rev. 167, 175 n.31 (2014) (discussing the relationship of independent agencies to OIRA review).
221. See, e.g., Joshua D. Wright, The Antitrust/Consumer Protection Paradox: Two Policies at War with Each Other, 121 Yale L.J. 2216, 2263 n.195 (2012) ("President Obama has indicated a desire for independent agencies to comply with his orders but has not required them to do so.").
222. Cf. Bruce Kraus & Connor Raso, Rational Boundaries for SEC Cost-Benefit Analysis, 30 Yale J. on Reg. 289, 339 (2013) ("While OIRA review would entail a loss of independence, independent agencies should be happy to discuss econometrics with OIRA if by doing so they preclude second-guessing by the D.C. Circuit.").
223. See, e.g., Cuomo v. Clearing House Ass'n, 557 U.S. 519, 523-24 (2009) (addressing a regulation promulgated under the National Bank Act purporting to preempt state law enforcement).
224. Wyeth v. Levine, 555 U.S. 555, 563 (2009) (determining whether the FDA's drug-labeling regulations preempt state law product liability claims).
225. Geier v. Am. Honda Motor Co., 529 U.S. 861, 865 (2000) (finding that a motor vehicle statute and regulation preempt a state common-law tort action).
226. Nina A. Mendelson, A Presumption Against Agency Preemption, 102 Nw. U. L. Rev. 695, 695 (2008) (observing how federal agencies are "taking aim" at state law through preemption).
227. Nina A. Mendelson, Chevron and Preemption, 102 Mich. L. Rev. 737, 741 (2004) [hereinafter Mendelson, Chevron and Preemption] (examining how to reconcile preemption doctrine with Chevron).
228. Gillian E. Metzger, Federalism and Federal Agency Reform, 111 Colum. L. Rev. 1, 5 (2011).
229. See Catherine M. Sharkey, Agency Coordination in Consumer Protection, 2013 U. Chi. Legal F. 329, 329 (addressing the need for horizontal coordination across federal agencies).
230. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
231. See Exec. Order 13,132, 64 Fed. Reg. 43,255, 43,257 (Aug. 4, 1999) (establishing special requirements for preemptive rulemaking).
232. 555 U.S. 555 (2009).
233. See Roderick M. Hills, Jr., Exorcising McCulloch: The Conflict-Ridden History of American Banking Nationalism and Dodd-Frank Preemption, 161 U. Pa. L. Rev. 1235, 1238 (2013) (noting that, under the Dodd-Frank Act, the OCC's preemption findings receive only Skidmore (not Chevron) deference, and field preemption is barred entirely).
234. Congress's decision to specify more stringent judicial review of the OCC's preemption determinations might have been motivated simply by its desire to rein in the overly aggressive preemption maneuvers of this one agency. Even so, the OCC's heavyhanded use of preemptive regulations in the pre-Dodd-Frank period was not checked by executive oversight. It is plausible that this absence of meaningful executive oversight (over what was then an executive agency) emboldened the OCC's remarkably aggressive strategy. If this were the case, then Congress's directive for heightened judicial scrutiny would still be directly linked to the absence of meaningful executive oversight.
235. OIRA is responsible for monitoring agencies' compliance with Executive Order 13,132 ("Federalism"). Memorandum from Jacob J. Lew, Dir., Office of Mgmt. & Budget, to the Heads of Exec. Dep'ts & Agencies & Indep. Regulatory Agencies, Guidance for Implementing E.O. 13132, "Federalism" (Oct. 28, 1999).
236. Exec. Order No. 13,132, § 8(a), 3 C.F.R. at 209.
237. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
238. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
239. See 12 U.S.C. § 25b(b)(5)(A) (2012) (identifying the standard of review for such preemption determinations).
240. Comptroller of the Currency as Regulator, Fed. Banking L. Rep. (CCH) ¶ 35-061 (2013), available at 2009 WL 3685981 ("The Dodd-Frank Wall Street Reform and Consumer Protection Act reestablished the OCC as an independent agency housed within the Treasury Department.").
241. 555 U.S. 555 (2009).
242. Requirements on Content and Format of Labeling for Human Prescription Drugs and Biologics.
243. Requirements for Prescription Drug Product Labels, 65 Fed. Reg. 81,082, 81,103 (proposed Dec. 22, 2000) (to be codified at 21 C.F.R. pt. 201).
244. Requirements on Content and Format of Labeling for Human Prescription Drugs and Biological Products, 71 Fed. Reg. 3922, 3934 (Jan. 24, 2006) (to be codified at 21 C.F.R. pts. 201, 314, 601).
245. Wyeth, 555 U.S. at 577.
246. See, e.g., In re Zyprexa Prods. Liab. Litig., 489 F. Supp. 2d 230, 240 (E.D.N.Y. 2007) (doubting "the adequacy and candor of representations to the FDA and of robustness of inquiry and decisions of the FDA" given that "the FDA's own research is limited and that it relies heavily on self-motivated representations and studies by the pharmaceutical industry").
247. Jackson v. Pfizer, Inc., 432 F. Supp. 2d 964, 968 n.3 (D. Neb. 2006) (refusing to give deference to the FDA's preemption preamble on the ground that "the FDA failed to comply with its requirements [under the federalism executive order] to communicate with the states and to allow the states an opportunity to participate in the proceedings prior to a preemption decision").
248. Catherine M. Sharkey, Federalism Accountability: "Agency-Forcing" Measures, 58 Duke L.J. 2125, 2188-89 (2009) [hereinafter Sharkey, Federalism Accountability].
249. See Catherine M. Sharkey, Products Liability Preemption: An Institutional Approach, 76 Geo. Wash. L. Rev. 449, 491-502 (2008) (proposing the "agency reference" model for judicial preemption decision-making and specifying judicial scrutiny of input from agencies).
250. Catherine M. Sharkey, Federalism Accountability: "Agency-Forcing" Measures, 58 Duke L.J. 2125, 2188-89 (2009) [hereinafter Sharkey, Federalism Accountability].
251. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).
252. See William Funk, Judicial Deference and Regulatory Preemption by Federal Agencies, 84 Tul. L. Rev. 1233, 1249-53 (2010) (supporting "weak or Skidmore deference" for agency interpretations involving implied preemption).
253. Garrick B. Pursley, Avoiding Deference Questions, 44 Tulsa L. Rev. 557, 561 (2009) (arguing that it is the judiciary's duty to interpret issues of federal supremacy (i.e., without giving any deference to agencies) for both constitutional and policy reasons).
254. See William W. Buzbee, Preemption Hard Look Review, Regulatory Interaction, and the Quest for Stewardship and Intergenerational Equity, 77 Geo. Wash. L. Rev. 1521, 1528 (2009) (suggesting that courts should grant greater policymaking latitude following open, deliberative, interactive, and transparent political processes).
255. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 315, 124 Stat. 1376, 1524 (2010).
256. Congress may have wanted specifically to remove any executive influence over the OCC's preemption position. This appears to be Senator Corker's position. When questioning Comptroller Thomas Curry during his confirmation hearings, the Senator asked the Comptroller whether he would keep the OCC "independent" and "not … let the Treasury browbeat you into a different position." Nominations of Martin J. Gruenberg, Thomas J. Curry, and S. Roy Woodall: Hearing Before the S. Comm. on Banking, Housing & Urban Affairs, 112th Cong. 16 (July 26, 2011) [hereinafter Nominations].
257. See Kent Barnett, Codifying Chevmore, 90 N.Y.U. L. Rev. (forthcoming Apr. 2014) (manuscript at 17) (on file with the New York University Law Review) ("Congress mandated mere Skidmore deference in light of the OCC's history of controversial preemption decisions based on conflict-of-interest and regulatory capture concerns.").
258. Arthur E. Wilmarth, Jr., The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services, 36 J. Corp. L. 893, 951 (2011) ("[M]embers of Congress and analysts agreed that the [financial services] industry has exercised excessive influence over bank regulators during the period leading up to the financial crisis.").
259. Dodd-Frank Act § 1044(b)(4).
260. See Roderick M. Hills, Jr., Exorcising McCulloch: The Conflict-Ridden History of American Banking Nationalism and Dodd-Frank Preemption, 161 U. Pa. L. Rev. 1235, 1238 (2013) (noting that, under the Dodd-Frank Act, the OCC's preemption findings receive only Skidmore (not Chevron) deference, and field preemption is barred entirely).
261. Arthur E. Wilmarth, Jr., The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services, 36 J. Corp. L. 893, 951 (2011) ("[M]embers of Congress and analysts agreed that the [financial services] industry has exercised excessive influence over bank regulators during the period leading up to the financial crisis.").
262. In the mid-1990s, states passed laws that regulated abusive lending practices and imposed other restrictions on banks doing business in the state. In 1996, the OTS issued a regulation declaring that "OTS hereby occupies the entire field of lending regulation for federal savings associations." Lending and Investment, 61 Fed. Reg. 50,951, 50,972 (Sept. 30, 1996).
263. Bank Activites and Operations.
264. Leasing, 66 Fed. Reg. 34,784, 34,786 (July 2, 2001).
265. Bank Activities and Operations, 69 Fed. Reg. 1895 (Jan. 13, 2004).
266. Bank Activities and Operations.
267. Real Estate Lending and Appraisals, 69 Fed. Reg. 1904 (Jan. 13, 2004).
268. Dodd-Frank Implementation, 76 Fed. Reg. 30,557, 30,564 (proposed May 26, 2011) (to be codified at 12 C.F.R. pts. 4-5, 7-8, 28 and 34).
269. Arthur E. Wilmarth, Jr., The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services, 36 J. Corp. L. 893, 951 (2011) ("[M]embers of Congress and analysts agreed that the [financial services] industry has exercised excessive influence over bank regulators during the period leading up to the financial crisis.").
270. Arthur E. Wilmarth, Jr., The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services, 36 J. Corp. L. 893, 951 (2011) ("[M]embers of Congress and analysts agreed that the [financial services] industry has exercised excessive influence over bank regulators during the period leading up to the financial crisis.").
271. A "State consumer financial law" is defined as a "State law that does not directly or indirectly discriminate against national banks" and that "directly and specifically regulates the manner, content, or terms and conditions of any financial transaction (as may be authorized for national banks to engage in), or any account related thereto, with respect to a consumer." Dodd-Frank Act § 1044(a)(2).
272. 5 U.S.C. § 706(2)(E) (2012).
273. Cf., e.g., Wyeth v. Levine, 555 U.S. 555, 556 (2013) (holding that the agency action did not deserve deference because it was at odds with available evidence). This is discussed further in Part IV.B.1.
274. The OCC's position is represented by the Justice Department in courts.
275. Kent Barnett has suggested that the call for substantial evidence review after an onthe- record proceeding creates an obligation for the OCC to use formal rulemaking and adjudication. See Kent Barnett, Improving Agencies' Preemption Expertise with Chevmore Codification, 83 Fordham L. Rev. (forthcoming 2014) (manuscript at 18) (on file with the New York University Law Review). If that is so, then the tie between fact-finding and preemption determinations is even tighter.
276. Raymond Natter & Katie Wechsler, Dodd-Frank Act and National Bank Preemption: Much Ado About Nothing, 7 Va. L. & Bus. Rev. 301, 358 (2012) (arguing that Congress's use of "substantial evidence" in lieu of "arbitrary and capricious" makes no meaningful difference to judicial review of the OCC's preemption determinations).
277. David Zaring, Reasonable Agencies, 96 Va. L. Rev. 135, 166-67 (2010).
278. Richard J. Pierce, Jr., Legislative Reform of Judicial Review of Agency Actions, 44 Duke L.J. 1110, 1113-18, (1995).
279. Richard J. Pierce & Sidney A. Shapiro, Political and Judicial Review of Agency Action, 59 Tex. L. Rev. 1175, 1186 (1981)
280. Ass'n of Data Processing Serv. Orgs. v. Bd. of Governors of the Fed. Reserve Sys., 745 F.2d 677, 683 (D.C. Cir. 1984) ("[I]n their application to the requirement of factual support the substantial evidence test and the arbitrary or capricious test are one and the same.").
281. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
282. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
283. Bank Activities and Operations, 69 Fed. Reg. 1895 (Jan. 13, 2004).
284. See Catherine M. Sharkey, Inside Agency Preemption, 110 Mich. L. Rev. 521, 570-82 (2012) [hereinafter Sharkey, Inside Agency Preemption] (discussing the absence of internal agency standards or guidelines for preemptive rulemaking).
285. Clearing House Ass'n v. Cuomo, 510 F.3d 105, 119 (2d Cir. 2007), aff'd in part, rev'd in part, 557 U.S. 519 (2009).
286. The OCC subsequently revised the Visitorial Powers Rule in light of the Dodd-Frank Act. Office of Thrift Supervision Integration.
287. Dodd-Frank Implementation, 76 Fed. Reg. 30,557, 30,564 (proposed May 26, 2011) (to be codified at 12 C.F.R. pts. 4-5, 7-8, 28 and 34).
288. I fully recognize that executive oversight and judicial review also serve quite different purposes. Executive oversight promotes coordination between different parts of the executive branch, see, e.g., Michael A. Livermore & Richard L. Revesz, Regulatory Review, Capture, and Agency Inaction, 101 Geo. L.J. 1337, 1367-69 (2013) (discussing OIRA's coordination function), whereas judicial review embodies a vision of separation of powers.
289. See, e.g., Sally Katzen, A Reality Check on an Empirical Study: Comments on "Inside the Administrative State," 105 Mich. L. Rev. 1497, 1507 (2007) (suggesting that regulations that are subject to OIRA oversight may be sharper and better supported than regulations that are not subject to OIRA review, given the agency's concern about being rebuked). Note that Sally Katzen is a former OIRA Administrator.
290. The Congressional Budget Office analyzed eighty-five Regulatory Impact Analyses (RIAs) and concluded that the average cost per RIA was $570,000, but ranged from $14,000 to $6 million. Cong. Budget Office, Regulatory Impact Analysis: Costs at Selected Agencies and Implications for the Legislative Process, at viii (1997). Hahn and Tetlock estimated that the cost of analyzing a major regulation is about $720,000, and that total regulatory impact analyses cost about $72 million annually. Robert W. Hahn & Paul C. Tetlock, Has Economic Analysis Improved Regulatory Decisions?, 22 J. Econ. Persp. 67, 80 (2008).
291. Thomas O. McGarity, Regulatory Analysis and Regulatory Reform, 65 Tex. L. Rev. 1243, 1331 (1987) ("The considerable limitations of cost-benefit analysis can be avoided by recognizing that cost-benefit analysis alone cannot dictate regulatory results in most regulatory contexts.").
292. Donald R. Arbuckle, The Role of Analysis on the 17 Most Political Acres on the Face of the Earth, 31 Risk Analysis 884, 888 (2011).
293. Catherine M. Sharkey, Federalism Accountability: "Agency-Forcing" Measures, 58 Duke L.J. 2125, 2188-89 (2009) [hereinafter Sharkey, Federalism Accountability].
294. See Jill E. Fisch, Leave It to Delaware: Why Congress Should Stay Out of Corporate Governance, 37 Del. J. Corp. L. 731, 767-68 (2013) (discussing interest groups' abilities to manipulate the notice-and-comment process).
295. Cf. Yoon-Ho Alex Lee, An Options Approach to Agency Rulemaking, 65 Admin. L. Rev. 881, 881 (2013) (describing Business Roundtable as having been "thought to have significantly raised the bar for rulemaking by independent agencies").
296. Parks v. MBNA Am. Bank, N.A., 278 P.3d 1193, 1203 (Cal. 2012).
297. Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 388 (1986).
298. Erik F. Gerding, Law, Bubbles, and Financial Regulation 150, 168-69 (2013).
299. John C. Coates IV, Cost-Benefit Analysis of Financial Regulation: Case Studies and Implications, 124 Yale L.J. (forthcoming 2014) (manuscript at 9), available at http://ssrn.com/abstract=2375396 ("[F]ull quantification in CBA/[Financial Regulation] is likely to be difficult because finance is at the heart of the economy, because it involves activities of groups of people (firms, markets) interacting in complex, difficult-to-study or difficult-to-predict ways, and because the forces that shape finance change rapidly through history.").
300. Jeffrey Gordon, The Empty Call for Benefit-Cost Analysis in Financial Regulation, 48 J. Legal Stud. (forthcoming 2014) (manuscript at 8), available at http://ssrn.com/abstract=2378562 ("[I]t is not only the rules but the adaptation to them, including the regulatory arbitrage, that creates the system of finance. These continuous second order effects make the benefits and costs of rule adoption impossible to quantify in a meaningful way").
301. Eric A. Posner & E. Glen Weyl, Benefit-Cost Paradigms in Financial Regulation, J. Legal Stud. (forthcoming 2014) (manuscript at 1), available at http://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1647&context=law_and_ economics.
302. Eric A. Posner & E. Glen Weyl, Cost-Benefit Analysis of Financial Regulations: A Response to Criticisms, Yale L.J.F. (forthcoming 2014) (manuscript at 1-2), available at http://ssrn.com/abstract=2436538 (responding to criticisms made by Coates and Gordon).
303. This is a difficult proposition to measure empirically. Moreover, there is reason to believe that new mobilization forces could alter the status quo. Consider, in this light, a recent three-hundred-page submission by "Occupy the SEC" on the SEC's proposed Volcker Rule. See Occupy the SEC, Prohibitions and Restrictions on Proprietary Trading and Certain Interests in and Relationships with, Hedge Funds and Private Equity Funds, Occupy SEC (2012), http://www.occupythesec.org/letter/OSEC%20-%20OCC-2011- 14%20-%20Comment%20Letter.pdf (comment in response to a notice of proposed rulemaking implementing section 619 of the Dodd-Frank Act). The comment also garnered significant media attention. I thank Matthew Shahabian for bringing this comment to my attention. Moreover, while I recognize this concern, I would not suggest that courts customize review based on whether there is an organized interest group that can produce information, or to take into account whether one side of an issue clearly has standing but the other may not. Agencies may, however, need to be more transparent with their overseers-whether the executive or courts-with respect to the inherent limitations they face.
304. See, e.g., Frank Ackerman & Lisa Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing 35 (2004) (noting that cost-benefit analysis has become a powerful weapon for opponents of regulation).
305. Lisa Heinzerling, Inside EPA: A Former Insider's Reflections on the Relationship Between the Obama EPA and the Obama White House, 31 Pace Envtl. L. Rev. (forthcoming 2014).
306. Stuart Shapiro & John F. Morrall III, The Triumph of Regulatory Politics: Benefit-Cost Analysis and Political Salience, 6 Reg. & Governance 189, 199-200 (2012) (examining the role of politics in cost-benefit analysis).
307. Donald R. Arbuckle, The Role of Analysis on the 17 Most Political Acres on the Face of the Earth, 31 Risk Analysis 884, 888 (2011).
308. See, e.g., Thomas W. Merrill, Capture Theory and the Courts: 1967-1983, 72 Chi.- Kent L. Rev. 1039, 1043 (1997) (describing how federal judges in the 1960s wielded judicial review to police agency capture).
309. Jennifer Nou, Agency Self-Insulation Under Presidential Review, 126 Harv. L. Rev. 1755, 1796-97 (2013).
310. Scott A. Keller, Depoliticizing Judicial Review of Agency Rulemaking, 84 Wash. L. Rev. 419, 425-27 (2009) (supporting a soft hard-look doctrine when agencies act in their area of technical expertise in order to avoid judicial policymaking).
311. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law, U. Chi. L. Rev. (forthcoming 2015) (manuscript at 38-39), available at http://ssrn.com/abstract=2460822. And it stands to reason that the informational demands of the first inquiry are larger than those of the latter.
312. Aaron-Andrew P. Bruhl, Hierarchically Variable Deference to Agency Interpretations, 89 Notre Dame L. Rev. 727, 759 n.108 (2014) (reviewing the Sunstein and Miles study and suggesting that EPA and NLRB rulemakings are "expected to be especially ideologically contentious, which probably reduced the level of deference the courts of appeals displayed").
313. Cf. David J. Barron, Foreword, From Takeover to Merger: Reforming Administrative Law in an Age of Agency Politicization, 76 Geo. Wash. L. Rev. 1095, 1147-48 (2008) (arguing that the "expertise-forcing mode of judicial review" of State Farm hard-look review be used to force federal agencies to "demonstrat[e] to the courts that such preemption decisions are not themselves strongly influenced by political considerations"). The same applies to purely political decisions by OIRA to forgo cost-benefit analysis for economically significant rules. For example, with respect to the USDA's chickenprocessing rule, discussed supra note 140, where OIRA approved the rule without reviewing the cost-benefit analysis, the absence of executive oversight should trigger heightened judicial review. Admittedly, however, it would be much more difficult (and problematic) for judicial review to vary depending upon the thoroughness of OIRA's executive oversight.
314. Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 388 (1986).
315. See Douglas H. Ginsburg, Remarks upon Receiving the Lifetime Service Award of the Georgetown Federalist Society Chapter, 10 Geo. J.L. & Pub. Pol'y 1, 3-5 (2012) (presenting statistics on where administrative law cases are heard). Of course, not every regulatory challenge will end up in the D.C. Circuit.
316. W. Kip Viscusi, Regulating the Regulators, 63 U. Chi. L. Rev. 1423, 1460 (1996). Cass Sunstein, a former OIRA Administrator, is likewise a strong proponent of the necessity of executive oversight to constrain agency discretion.
317. Cass R. Sunstein, The Real World of Cost-Benefit Analysis: Thirty-Six Questions (and Almost as Many Answers), 114 Colum. L. Rev. 167, 175 n.31 (2014) (discussing the relationship of independent agencies to OIRA review).
318. See generally Jerry L. Mashaw & David L. Harfst, The Struggle for Auto Safety (1990) (describing the political, legal, and bureaucratic obstacles that agencies face in trying to achieve their goals).
319. Richard J. Pierce, Jr., Seven Ways to Deossify Agency Rulemaking, 47 Admin L. Rev. 59 (1995) (discussing the ossification thesis and how to solve it).
320. Thomas O. McGarity, Regulatory Analysis and Regulatory Reform, 65 Tex. L. Rev. 1243, 1331 (1987) ("The considerable limitations of cost-benefit analysis can be avoided by recognizing that cost-benefit analysis alone cannot dictate regulatory results in most regulatory contexts.").
321. See, e.g., David C. Vladeck & Thomas O. McGarity, Paralysis by Analysis: How Conservatives Plan to Kill Popular Regulation, Am. Prospect, Summer 1995, at 1 (arguing that antiregulatory politicians seek to cripple agencies by "enacting procedural reforms that sound neutral but make effective regulation impossible").
322. Recent Case, D.C. Circuit Finds SEC Proxy Access Rule Arbitrary and Capricious for Inadequate Economic Analysis - Business Roundtable v. SEC, 647 F.3d 1144 (D.C. Cir. 2011), 125 Harv. L. Rev. 1088, 1094-95 (2012) (suggesting that the standard of review in Business Roundtable would result in the ossification of the SEC's regulatory process).
323. See, e.g., Jason Webb Yackee & Susan Webb Yackee, Testing the Ossification Thesis: An Empirical Examination of Federal Regulatory Volume and Speed, 1950-1990, 80 Geo. Wash. L. Rev. 1414, 1436-39 (2012) (arguing that the ossification thesis has not been subjected to serious emprical testing).
324. William S. Jordan III, Ossification Revisited: Does Arbitrary and Capricious Review Significantly Interfere with Agency Ability to Achieve Regulatory Goals Through Informal Rulemaking?, 94 Nw. U. L. Rev. 393, 440 (2000)
325. Richard J. Pierce, Jr., Rulemaking Ossification Is Real: A Response to Testing the Ossification Thesis, 80 Geo. Wash. L. Rev. 1493, 1494 (2012) ("[N]othing in the Yackees' study contradicts or undermines the ossification hypothesis.").
326. The Congressional Budget Office analyzed eighty-five Regulatory Impact Analyses (RIAs) and concluded that the average cost per RIA was $570,000, but ranged from $14,000 to $6 million. Cong. Budget Office, Regulatory Impact Analysis: Costs at Selected Agencies and Implications for the Legislative Process, at viii (1997). Hahn and Tetlock estimated that the cost of analyzing a major regulation is about $720,000, and that total regulatory impact analyses cost about $72 million annually. Robert W. Hahn & Paul C. Tetlock, Has Economic Analysis Improved Regulatory Decisions?, 22 J. Econ. Persp. 67, 80 (2008).
327. See, e.g., Stuart Shapiro, Agency Discretion as "Whac-a-Mole": The Challenge of Restricting Agency Use of Nonlegislative Rules, 37 Harv. J.L. & Pub. Pol'y 523, 528-29 (2014).
328. Association of Irritated Residents v. EPA, 494 F.3d 1027, 1030 (D.C. Cir. 2009)
329. Genelink, Inc., No. 112-3095, 2014 WL 187458, at *11 (F.T.C. Jan. 7, 2014) (approving a consent decree entered into by the FTC with companies that deceptively marketed their nutritional supplements by requiring, in the future, that their health benefits be supported by two randomized trials). I thank Adam Zimmerman for bringing these examples to my attention.
330. See Arthur E. Wilmarth, Turning a Blind Eye: Why Washington Keeps Giving In to Wall Street, 81 Cinn. L. Rev. 1283, 1321 (2013) ("As an additional method for slowing down Dodd-Frank's implementation, Republicans blocked any significant increases in the budgets of the CFTC and SEC during 2010, 2011 and 2012.").
331. Thomas O. McGarity, Administrative Law as Blood Sport: Policy Erosion in a Highly Partisan Age, 61 Duke L.J. 1671, 1680 (2013) ("Winning can also mean incapacitating the agency by reducing its annual appropriation, repealing the agency's organic act, or whittling away its regulatory authority through rifle-shot riders attached to must-pass legislation.").
332. Cf. Ian D. Ghrist, How to Sufficiently Consider Efficiency, Competition, and Capital Formation in the Wake of Business Roundtable, 14 Transactions: Tenn. J. Bus. L. 221, 243 (2013) (arguing that the fact that agency resources are limited should not justify a lax standard of judicial review).
333. Moreover, if Congress fails to fund an agency, that is simply a democratic expression of the desire to roll back government or reverse delegation, and Congress has that right.
334. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 523 (2009) ("[I]ndependent agencies are sheltered not from politics but from the President, and it has often been observed that their freedom from presidential oversight (and protection) has simply been replaced by increased subservience to congressional direction.").
335. For example, inspectors general (IG) report their findings and recommendations semi-annually to the agency head, who must transmit the IG report to Congress within thirty days, with comments and suggestions. Inspector General Act of 1978 § 5(b), 5 U.S.C. app. at 501, 506-07 (2012).
336. See, e.g., Robert B. Ahdieh, Reanalyzing Cost-Benefit Analysis: Toward a Framework of Function(s) and Form(s), 88 N.Y.U. L. Rev. 1983, 1993 (2013) (arguing that the provision does not describe a straightforward cost-benefit analysis, but rather "is best understood as an unusual means for Congress to force SEC consideration of substantive factors not prioritized by its organic statutes, nor capable of ready incorporation into those statutes").
337. The Senators explained that their "request arises from our concern that regulatory agencies are conducting rulemakings to implement Dodd-Frank without adequately considering the costs and benefits of their rules and the effects those rules could have on the economy." Letter from Sen. Richard C. Shelby et al., Senate Comm. on Banking, Hous. & Urban Affairs, to Elizabeth A. Coleman, Inspector Gen., Fed. Reserve Bd., et al. (May 4, 2011) (on file with the New York University Law Review).
338. E.g., Office of Inspector Gen., U.S. Sec. & Exch. Comm'n, Report of Review of Economic Analyses Performed by the Securities and Exchange Commission in Connection with Dodd-Frank Act Rulemakings (2011), available at http://www .sec.gov/about/offices/oig/reports/audits/2011/report_6_13_11.pdf.
339. Office of Inspector Gen., U.S. Commodity Futures Trading Comm'n, A Review of Cost-Benefit Analyses Performed by the Commodity Futures Trading Commission in Connection with Rulemakings Undertaken Pursuant to the Dodd-Frank Act (2011), available at http://www.cftc.gov/ucm/groups/public/@aboutcftc/documents/file/ oig_investigation_061311.pdf.
340. Office of Inspector Gen., Evaluation of the FDIC's Economic Analysis of Three Rulemakings to Implement Provisions of the Dodd-Frank Act (2011), available at http://fdicig.gov/reports11/11-003EV.pdf.
341. Council of Inspectors Gen. on Fin. Oversight, Annual Report of the Council of Inspectors General on Financial Oversight (2011), available at http://www.sec.gov/ about/offices/oig/reports/reppubs/other/cigfo_%20annual_report_july_2011.pdf (describing the Council of Inspectors General on Financial Oversight and consolidating reports on the individual agencies' work issued by inspectors general members).
342. Office of Inspector Gen., U.S. Sec. & Exch. Comm'n, Rep. No. 499, Follow-Up Review of Cost-Benefit Analyses in Selected SEC Dodd-Frank Act Rulemakings, at iii-iv (2012), available at http://www.sec.gov/about/offices/oig/reports/ audits/2012/rpt499_followupreviewofd-f_costbenefitanalyses_508.pdf.
343. The SEC's Aversion to Cost-Benefit Analysis: Hearing Before the Subcomm. on TARP, Financial Services and Bailouts of Public and Private Programs of the H. Comm. on Oversight and Gov't Reform, 112th Cong. 10-11 (2012) [hereinafter SEC Hearing] (prepared statement of Mary Schapiro, Former Chairman, SEC) ("No statute expressly requires the Commission to conduct a formal cost-benefit analysis as part of its rulemaking activities, but-since at least the early 1980s-the Commission has considered potential costs and benefits in its rulemaking as a matter of good regulatory practice.").
344. See Staff of H. Comm. on Oversight & Gov't Reform, 110th Cong., FDA Career Staff Objected to Agency Preemption Policies 4 (Comm. Print 2008), available at http://oversight-archive.waxman.house.gov/documents/20081029102934.pdf ("[T]he Office of Chief Counsel ignored the warnings from FDA scientists and career officials that the preemption language [of the 2006 preamble] was based on erroneous assertions about the ability of the drug approval process to ensure accurate and up-to-date drug labels.").
345. Wyeth v. Levine, 555 U.S. 555, 578-79 n.11 (2009).
346. My aim is not to present an exhaustive comparison of congressional and executive oversight along the information-forcing dimension, but instead to set the stage for introducing a novel role that Congress could play. That said, there are several inherent limitations of the congressional oversight model. First, congressional oversight would most likely occur only after a final rule is promulgated, whereas OIRA review focuses directly on the adequacy of the agency's cost-benefit analysis and can provide immediate feedback and suggestions for improvement. Second, the consequences of failing to satisfy OIRA are direct and immediate-the record, and possibly the rule, must be improved to withstand scrutiny whereas the consequences of congressional disapproval may be more remote and speculative. Third, OIRA reviews many more rules than Congress does and thus has built up comparative expertise in evaluating the adequacy of cost-benefit analyses. And- critical to the argument at the core of this Article-courts reviewing rules can take into account the fact that OIRA gave its imprimatur to the cost-benefit analysis supporting the rule, whereas congressional oversight typically occurs only when there is a severe problem to be flagged.
347. Jacob E. Gerson, Administrative Law Goes to Wall Street: The New Administrative Process, 65 Admin. L. Rev. 689, 718 (2013).
348. Catherine M. Sharkey, Federalism Accountability: "Agency-Forcing" Measures, 58 Duke L.J. 2125, 2188-89 (2009) [hereinafter Sharkey, Federalism Accountability].